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New ounces boost New Dawn’s southern Africa gold mines

by Greg Klein

With five gold mines in operation and a sixth on care and maintenance, New Dawn Mining TSX:ND released updated resource and reserve numbers on December 17. The updates increase the measured and indicated categories by 44.1%, the company stated. Proven and probable reserves, included in the M&I, increased by 123%. Totals for the six mines now show:

New Dawn’s six Zimbabwean gold mines saw a 44.1% increase in M&I resources, which includes a 123% jump in P&P reserves.

In October New Dawn announced a 41% increase in gold production for the year ending September 30, with 37,623 gold ounces and revenue of $61.94 million. New Dawn forecast another 41% production increase for fiscal 2013.

New Dawn’s wholly owned mines are the Turk and Angelus mine, Camperdown and Old Nic. Through the company’s 85% interest in its Falcon Gold Zimbabwe subsidiary, New Dawn owns 85% of the Dalny, Golden Quarry and Venice mines. Venice is on care and maintenance.

New Dawn intends to acquire the three mines’ remaining 15% prior to implementing a plan of indigenisation, a requirement that foreign miners allow a 51% takeover of their operations by Zimbabweans.

A few other Zimbabwe-based miners have indigenisation plans underway.

Under conditional agreements previously announced by Caledonia Mining TSX:CAL, a 16% interest in its Blanket gold mine would be sold to Zimbabwe’s National Indigenisation and Economic Empowerment Fund (NIEEF) for US$11.74 million. Another 15% would go to a Zimbabwean consortium for $11.01 million and 10% to a Blanket employees trust fund for $7.34 million. The company would also donate a 10% interest and $1 million to a local community trust.

On December 14, Impala Platinum and Aquarius Platinum announced a proposal to divest 51% of their 50/50 joint venture in the Mimosa platinum mine. Under this proposal, 10% of the mine would go to a local community trust, 10% to an ownership trust for Zimbabwean employees and 31% to the NIEEF. In return, Impala and Aquarius would get a total of US$550 million, based on an agreed fair market value of $1.08 billion. Mimosa Investments, the Impala/Aquarius JV, “will provide a vendor loan-funding mechanism to facilitate the transaction, which has a term of 10 years,” Aquarius stated.

New Dawn and the Zimbabwean government signed an MOU in 2011 but details are confidential. IR rep Richard Buzbuzian would only tell ResourceClips, “We’re still going through the process so we can’t provide clarity.” He added that New Dawn’s exploration projects show the company’s committed to Zimbabwean expansion. The geology features “the world’s third-largest greenstone belt” while the infrastructure is “excellent—Zimbabwe is one of the most highly developed countries in Africa,” he says.

New Dawn opened December 17 at $0.87 and closed on the day’s high of $0.89.